U.S. May Stop Reimbursing Tenet Hospital

By KURT EICHENWALD

Published: September 5, 2003

The government has notified Tenet Healthcare that it will hold proceedings to bar what had once been one of its most profitable hospitals from federal health care programs, the company announced yesterday.

The move comes after accusations that potentially hundreds of patients had unnecessary heart tests and surgery at the hospital, the Redding Medical Center in Redding, Calif.

Tenet was notified late Wednesday by the office of the inspector general with the Department of Health and Human Services of plans to begin proceedings. Tenet has 35 days to submit documents and other evidence to prove that the bar is unnecessary, and it said in a statement yesterday that it would do so.

In the notice, Tenet said in a statement, the inspector general's office said it made its decision after determining that Redding Medical Center had ''furnished cardiology and cardiac services (including several cardiac catheterizations and coronary artery bypass grafts) that were medically unnecessary and failed to meet professionally recognized standards of health care.'' The government determined that the improper treatments and procedures were provided at least from 1999 through 2002.

The investigation of Redding was disclosed last October, when agents with the F.B.I. raided the hospital and the offices of Dr. Chae Hyun Moon and Dr. Fidel Realyvasquez. Dr. Moon was chief of Redding's cardiology department; Dr. Realyvasquez was its top cardiac surgeon.

Since then, the Redding cardiology program was effectively -- albeit temporarily -- shut down. Recently, Dr. Moon agreed to surrender his medical license pending resolution of the investigation. In August, Tenet agreed to a deal with the Justice Department and other federal agencies, under which it agreed to pay $54 million to settle accusations that it engaged in what is known as medical necessity fraud -- billing health care programs for treatments or diagnostic tests that were unnecessary.

Under the settlement's terms, however, the Department of Health and Human Services was allowed to continue its inquiry into whether the hospital should be barred from receiving reimbursement from Medicare and other federal health programs. Such a move could be financially devastating; American hospitals often depend on such payments for half of their revenue or more.

In its statement, Tenet said it would work with the government to ensure that the services provided by the hospital, a 269-bed facility that serves nine rural communities, would continue without interruption.